Oil Holds Near $70, But Surplus Warnings Grow
Oil prices are holding near $70 a barrel, supported by seasonal demand and low inventories at major storage hubs. Still, analysts warn of a looming supply glut later this year. TotalEnergies and Equinor have flagged rising production from OPEC+ and new projects in Norway and Brazil as key contributors to future oversupply.
The IEA and U.S. EIA both estimate that global supply will exceed demand by up to 2 million barrels per day by 2026, the largest gap since the pandemic. A surplus of up to 200 million barrels is expected in the second half of 2025. Biofuel output, which competes with crude oil, is also projected to rise.
For now, the market remains tight. Refining margins are strong, and demand is robust, especially for jet fuel. Vitol Group noted record flight activity, and U.S. weekly oil demand is at its highest in 2025. Historical trends suggest that demand estimates are often revised upward, potentially narrowing the expected surplus.
While the IEA still sees global demand hitting a record 104 million barrels per day this year, JPMorgan warns that rising inventories will eventually appear in OECD countries. This build-up is not yet priced in, but could soon pressure oil prices lower.
Source: Newsmaker.id
